The 10,000 Accounts Receivable of DEF Company Have a Total

question 8

Multiple Choice

The 10,000 accounts receivable of DEF Company have a total book value of $120,000.A CPA has selected and audited a sample of 100 accounts with a total book value of $1,000 and an audited value of $1,200. Using the difference estimation technique,estimated total audited value of the population is:

• A)$100,000.
• B)$120,000.
• C)$140,000.
• D)$144,000

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Annual Retirement Income

The total amount of income a person receives in one year after retiring from work, which can come from pensions, savings, investments, or other sources.